SoftBank’s Vision Fund is preparing to invest $1 billion in Grab

SoftBank’s Vision Fund is set to continue its recent spree of investments in Asian tech unicorns. The mega fund — which is targeted at $100 billion — is planning to invest upwards of $1 billion into Southeast Asia’s ride-hailing leader Grab, two sources with knowledge of the plan told TechCrunch. The investment could reach as much as $1.5 billion, one source added.

A SoftBank representative did not respond to a request for comment. Grab declined to comment.

The Vision Fund has made significant investments in three billion-dollar Asian companies in recent months. That includes backing India’s OYO as part of a $1 billion round (which included money from Grab) in September, writing a $2 billion check for Korea’s Coupang in November and co-leading a $1.2 billion round for Tokopedia in Indonesia alongside Alibaba earlier this month.

There is a pattern that SoftBank appears to be following here.

In all three cases, the Japanese company was an existing investor and, having transferred its stakes to the Vision Fund, it then doubled down and invested again via the Vision Fund itself. That’s also the plan for this Grab deal, TechCrunch understands.

SoftBank’s most recent financial report, filed in November, explains that it plans to move its stakes in ride-hailing firms Uber, China’s Didi, India’s Ola and Grab over to the Vision Fund. But that hasn’t happened yet and it isn’t clear when it will.

“The Company expects that the necessary procedures will be made in the future to obtain applicable consent from limited partners of the Fund and regulatory approvals for the transfer,” it explained in the report, which doesn’t include a projected timeframe.

One source told TechCrunch that the investment in Grab is contingent on that equity transfer being made, as was the case with Tokopedia and Coupang, which saw SoftBank-owned stakes transferred to the fund in Q3 of this year.

Grab CEO and co-founder Anthony Tan [Photographer: Ore Huiying/Bloomberg/Getty Images]

While we don’t know how long that wait will be, Grab is hardly short on cash. The Singapore-based company is putting the final touches to its Series H fund which is focused on raising a total of $3 billion. It has already received significant contributions from Toyota, Microsoft, Yamaha Motors, Booking Holdings and a range of institutional investors.

Grab operates across eight markets in Southeast Asia, where it claims over 130 million downloads and more than 2.5 billion completed rides to date. The company acquired Uber’s business earlier this year in a deal that saw the U.S. company pick up a 27.5 percent stake in Grab and turn their rivalry into a partnership. The merger deal, however, was criticized by regulators and, in Singapore, the pair were fined a total of $9.5 million for violating anti-competition laws.

Grab is Southeast Asia’s highest-valued tech startup, having commanded an $11 billion valuation through this Series H round. It isn’t clear how much that figure will increase if, as and when this Vision Fund investment closes. The company has raised around $6.8 billion to date from investors, according to data from Crunchbase.

Zynga to acquire Small Giant Games, the maker of Empires & Puzzles, for $700M

Social game developer Zynga has entered into an agreement to acquire Small Giant Games, the startup behind the popular mobile game Empires & Puzzles, in a deal expected to total $700 million.

Zynga, which has tumbled since its 2011 Nasdaq initial public offering, will initially acquire 80 percent of Small Giant Games for $560 million, composed of $330 million in cash and $230 million of unregistered Zynga common stock. Zynga will fund part of the transaction with a $200 million credit facility.

“We’ve been impressed by the quality and momentum of Empires & Puzzles as we add another Forever Franchise into Zynga’s portfolio,” Zynga chief executive officer Frank Gibeau said in a statement. “Small Giant has created an innovative game that delivers a unique player experience that engages over the long term.”

The deal is expected to close on January 1. Zynga will purchase the remaining 20 percent of Small Giant over the next three years “at valuations based on specified profitability goals.”

Helsinki-based Small Giant Games had raised $52 million in equity funding from EQT Ventures, Creandum, Spintop Ventures, Profounders and others since it was founded in 2013. The company reported $33 million of revenue for Empires & Puzzles, its most popular game, 10 months after its launch in 2017. Small Giant, which is also behind Alliance Wars and Season 2: Atlantis, says they exceeded 2017’s revenue just four months into 2018.

“Our studio was founded on the idea that small, skillful teams can accomplish giant things, and I am confident that partnering with Zynga is the right next step in our evolution,” Small Giant CEO Timo Soininen said in a statement. “We will now operate as a separate studio within Zynga, maintaining our identity, culture and creative independence. By leveraging the expertise and support from the wider Zynga team, we will amplify the reach of Empires & Puzzles and the new games in our development pipeline.”

Zynga, founded in 2007, is the developer of FarmVille, Zynga Poker, Words with Friends and several other mobile games. The company reported revenues of $248.88 million for the quarter ended September 2018, failing to meet analyst estimates.

Zynga expects to bring in $243 million in revenue in the fourth quarter of 2018.

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Bowtie raises $30M to bring the digital insurance model to Hong Kong

The digital revolution has spawned ‘challenger’ banks that operate entirely online, with no high street presence. That phenomenon has taken off in Europe — particularly the UK — but over in Hong Kong, one of the world’s key financial hubs, the digital-only push is coming to the insurance industry.

Bowtie, a Hong Kong-based digital insurer, just announced a double milestone today: the company has become the first online-only operator to earn a license in the country while it has also revealed it has raised a HK$234 million ($30 million) Series A funding round.

Founded just over one year ago, Bowtie plans to offer a range of health-focused insurance products to Hong Kong consumers. It’ll launch in the first half of 2019 however, per the ‘virtual’ insurer license issued by Hong Kong’s Insurance Authority (IA), it will not maintain any physical presence for consumers. That’s in stark contrast to the traditional industry, but the idea is to pass on cost benefits to consumers, provide strong offline customer service and offer a more transparent experience.

That vision already has some hefty weight behind it. Sun Life, the $20 billion global insurance giant, is one investor in that Series A round via its Hong Kong business unit. The other backer is Hong Kong X Technology Fund, a two-year-old program backed by the likes of Tencent founder Pony Ma and Sequoia China chief Neil Shen.

In an interview with TechCrunch, Bowtie co-founder and co-CEO Michael Chan stressed that his company will operate independently of Sun Life Hong Kong.

“We definitely like the value alignment,” he explained. “They have been very gracious and trusting, giving us a lot of management control.”

Chan clarified that there will be no sharing of customers or customer data. He painted a picture of a business — Sun Life — that’s curious about the potential of digital-only services and keen to see what a startup — Bowtie — can do with a leaner and more agile model. However, Chan was unable to confirm the size of Sun Life’s investment, and whether it owns a majority of the startup.

“We believe in Bowtie’s vision and commitment to enhancing the customer experience. Our investment complements our business, while enabling new distribution modes through the latest technology and digital innovations,” said Fabien Jeudy, CEO of Sun Life Hong Kong, in a press statement.

Indeed, there could be the potential for collaboration in the future, particularly since Sun Life has a strong presence in Asia Pacific, where its operations span Hong Kong, the Philippines, Japan, Indonesia, India, China, Australia, Singapore, Vietnam and Malaysia.

“If this business model makes sense, we could potentially collaborate on expansions,” said Chan, who spent nearly a decade with the likes of EY and PwC in the U.S. before returning to Hong Kong in 2015.

The Bowtie team at its office in Hong Kong

That’s looking a little far into the future for a company that has only just received the regulatory green light. When pushed on a potential expansion strategy, such as possible markets and entry times, Chan said there’s currently no information to share.

“It’s really very much a one step at a time approach,” Chan told TechCrunch. “Everything has to run smoothly” before the company considers moving outside of Hong Kong. Although he did acknowledge that “most of the growth” from the global insurance industry is happening in Asia.

Chan and fellow co-CEO and co-founder Fred Ngan met working in the U.S. and, after both returning to their country of birth, they visualized the potential for a disruptive online play whilst working in consulting and other companies, Chan said. The IA’s ‘fast track’ for virtual insurers was that spark. Announced in September 2017, the program quickly attracted over 40 applicants — including global firms — and Chan said that, while there were teething issues around accommodating online-only businesses, the process was rapid and as thorough as the awarding of a traditional license.

“Bowtie is all about delivering convenience through technology. Our market research shows Hong Kong consumers would love to be able to sign up for health insurance and submit a claim online, but the insurance industry has essentially operated the same way when it first began 300 years ago,” Chan said in a prepared statement.

Unlike others in the tech space across Asia, Bowtie doesn’t plan to locate its development team in other parts of the world, despite the challenge of hiring tech teams in Hong Kong.

“That’s fine for more established or mature models, but with the level of commitment we’ve given the regulator and our customers, I think that it’s best we are all here,” Chan said in an interview. “I truly believe there is good talent in Hong Kong.”

Where it has needed to, Chan said the company has hired from overseas, including Silicon Valley.

Certainly, the ongoing privacy snafus from U.S. tech companies and the polarizing politics mean that markets like Hong Kong have never been in a stronger position to lure new hires from Silicon Valley, New York, London and other Western hubs. Meanwhile, its insurance industry hires have from come from firms such as AIA, AXA, Chubb, Manulife, Prudential and Sun Life.

Grab invests $100M into India’s OYO to expand its budget hotel service in Southeast Asia

Southeast Asian ride-hailing firm Grab has made its most ambitious investment to date after it backed India-headquartered budget hotel network OYO to the tune of $100 million. The investment was part of a $1 billion Series E round led by SoftBank’s Vision Fund that closed back in September.

The deal was first made public via a regulatory filing in India, as Economic Times reported.

“We can confirm the investment into OYO,” a Grab spokesperson told TechCrunch.

Grab has done a handful of strategic deals thus far, including investments in bike-sharing startup oBike and grocery delivery service HappyFresh, but those have been far smaller and local to Southeast Asia. Its highest acquisition to date is around $100 million for Indonesia-based offline payment network Kudo some 18 months ago.

The deal with OYO is not only far higher but also outside of its immediate home turf, which spans eight countries in Southeast Asia. OYO’s business is heavily focused on India and China, but the company is also active in Nepal, Malaysia and, most recently, the UK. That Series E deal was aimed at funding international growth and it looks like Grab will work closely with the company to help expand its presence in Southeast Asia, a region with over 650 million consumers and a fast growing digital economy.

A source with knowledge of discussions told TechCrunch that Grab was primarily motivated to partner with OYO for its potential to boost its GrabPay service. The core idea here is that GrabPay could become the preferred payment method for OYO in Southeast Asia, thereby boosting Grab’s ambition of dominating the region’s mobile payment space.

OYO claims to have over 10,000 franchised or leased hotels in its network which it says spans 350 cities across five countries, although most of that is concentrated on India and China. In the latter country, OYO says it offers 87,000 rooms in 171 cities after launching in the country in June 2018.

Southeast Asia, where OYO is already present via Malaysia, is an obvious next step and Grab could also give it a helpful boost to reaching customers by including its service on its in-app platform. Months after a deal to buy Uber’s local business in exchange for a 27.5 percent equity stake, Grab unveiled a ‘platform’ designed to aggregate services in the region to give its audience of over 110 million registered users visibility of services that they may like. That, in turn, can help companies tap into the Grab userbase, although some users have complained that Grab’s app is increasingly ‘cluttered’ with additional services and information beyond basic transportation.

Grab has already partnered with travel giant Booking — which recently invested $200 million in its business — to offer deals to its users, and it is quite conceivable that it could do the same with OYO to help the Indian firm’s efforts in Southeast Asia.

The $11 billion-valued ride-hailing firm isn’t short of cash — having raised over $3 billion this year — so it can afford to make the occasional splashy investment. However, it might need a budget reallocation. That’s because Indonesian rival Go-Jek’s continued Southeast Asia expansion is threatening to reignite a subsidiary war that Grab probably thought it had won for good after Uber’s exit. It’ll be interesting to watch how that competition weighs in Grab’s overall effort to go from ride-hailing into the ‘super app’ space, covering payments, local services and more.

Contentful raises $33.5M for its headless CMS platform

Contentful, a Berlin- and San Francisco-based startup that provides content management infrastructure for companies like Spotify, Nike, Lyft and others, today announced that it has raised a $33.5 million Series D funding round led by Sapphire Ventures, with participation from OMERS Ventures and Salesforce Ventures, as well as existing investors General Catalyst, Benchmark, Balderton Capital and Hercules. In total, the company has now raised $78.3 million.

It’s been less than a year since the company raised its Series C round and, as Contentful co-founder and CEO Sascha Konietzke told me, the company didn’t really need to raise right now. “We had just raised our last round about a year ago. We still had plenty of cash in our bank account and we didn’t need to raise as of now,” said Konietzke. “But we saw a lot of economic uncertainty, so we thought it might be a good moment in time to recharge. And at the same time, we already had some interesting conversations ongoing with Sapphire [formerly SAP Ventures] and Salesforce. So we saw the opportunity to add more funding and also start getting into a tight relationship with both of these players.”

The original plan for Contentful was to focus almost explicitly on mobile. As it turns out, though, the company’s customers also wanted to use the service to handle its web-based applications and these days, Contentful happily supports both. “What we’re seeing is that everything is becoming an application,” he told me. “We started with native mobile application, but even the websites nowadays are often an application.”

In its early days, Contentful focused only on developers. Now, however, that’s changing, and having these connections to large enterprise players like SAP and Salesforce surely isn’t going to hurt the company as it looks to bring on larger enterprise accounts.

Currently, the company’s focus is very much on Europe and North America, which account for about 80 percent of its customers. For now, Contentful plans to continue to focus on these regions, though it obviously supports customers anywhere in the world.

Contentful only exists as a hosted platform. As of now, the company doesn’t have any plans for offering a self-hosted version, though Konietzke noted that he does occasionally get requests for this.

What the company is planning to do in the near future, though, is to enable more integrations with existing enterprise tools. “Customers are asking for deeper integrations into their enterprise stack,” Konietzke said. “And that’s what we’re beginning to focus on and where we’re building a lot of capabilities around that.” In addition, support for GraphQL and an expanded rich text editing experience is coming up. The company also recently launched a new editing experience.

Contentful, a Stripe for content management, raises $28M led by General Catalyst

Tencent Music moving ahead with its $1.2B U.S. stock market debut

Tencent Music Entertainment’s initial public offering is back in motion, two months after the company reportedly postponed it amid a global selloff. In a regulatory filing today, the company, China’s largest streaming music service, said it plans to offer 82 million American depositary shares (ADS), representing 164 million Class A ordinary shares, for between $13 to $15 each. That means the IPO will potentially raise up to $1.23 billion.

The company is offering 41.03 million ADS, while selling shareholders will offer the remaining 40.97 million ADS. It will list on the New York Stock Exchange under the ticker symbol TME. According to the filing, Tencent Music’s controlling shareholder, Tencent Holdings, has agreed to buy Class A ordinary shares valued at up to $32 million.

With about 800 million monthly active users, Tencent Music is not only China’s largest online music entertainment platform, but one of the biggest in the world. To put that number in context, Spotify, one of Tencent Music’s shareholders and strategic partners, currently has 170 million monthly active users.

Tencent Music first filed for its stock market debut at the beginning of October, but then the WSJ reported that it had halted its IPO plans because of a selloff in global markets that hit Chinese markets particularly hard. The stock market is currently rallying, however, thanks to a truce in the U.S.-China trade war.

The offering’s lead underwriters are Morgan Stanley, Goldman Sachs, J.P. Morgan, Deutsche Bank Securities, and Bank of America Merrill Lynch.